This guide explains compensatory damages in Canada, including special vs. general damages, the general damages cap, and Ontario deductibles
Compensatory damages are how Canadian courts put a dollar figure on the real losses an injured person suffers when someone else is at fault. In this article, we will discuss the types of compensatory damages available in Canada and the rules lawyers need to know when claiming them on behalf of an injured client.
Compensatory damages make up the bulk of Canadian tort law. They are the main remedy courts award when a defendant’s negligence or unlawful act harms the plaintiff.
Simply, compensatory damages are money awards meant to reimburse an injured person for actual losses, not to punish the wrongdoer. This is why they are also called “actual damages” not just in Canada but also in other jurisdictions.
Under Canadian civil practice, courts ask two simple questions in tort cases:
The first answer determines whether the defendant is legally liable. The second sets the dollar amount of the compensatory damages award.
Check out this video to learn more about damages, specifically economic losses:
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Again, compensatory damages focus on the plaintiff’s loss, and not on punishing the defendant. As such, the kind of damages that categorically acts as a punishment are punitive damages.
Punitive damages may be awarded over and above compensatory damages, and are meant to deter the defendant, and other like them, from repeating the harmful conduct. In other words, compensatory damages look backward at what the plaintiff lost, while punitive damages look forward to the behaviour that society wants to discourage.
One of the landmark decisions on punitive damages in Canada is Baker v. Blue Cross Life Insurance Company of Canada, 2023 ONCA 842. Here, the Ontario Court of Appeal affirmed the jury’s punitive damages award of $1.5 million, which is one of the largest punitive damages awards in a long-term disability claim in the country.
There are two main types of compensatory damages that clients should understand before estimating a personal injury payout:
Also called economic damages, these are the financial losses that can be proven with bills, receipts, and other documentary evidence. They cover specific, quantifiable losses such as medical bills, rehabilitation expenses, lost wages, loss of future earning capacity, adjusted living costs, and property repair.
Also called non-economic damages, emotional damages, or pain and suffering damages, these cover the more personal impact on health and quality of life. These awards can also reflect mental anguish and other intangible harms that cannot be assigned a precise dollar figure.
For both types of compensatory damages, plaintiffs must:
Without proof on both points, the court cannot award any damages. In addition, there are specific rules when it comes to proving special and general damages.
Because special damages depend on documentary proof, courts treat them as evidence-driven calculations. Lawyers must organize medical bills, earnings statements, future-cost estimates, and other financial records to prove the claim in court.
For non-economic damages, lawyers must gather evidence of the severe or catastrophic injuries that affected the plaintiff’s quality of life. This may include lasting pain and emotional distress, which must still be linked to the defendant’s conduct.
Injured persons should be advised to seek early medical care immediately after an accident, which creates the documentation needed to support a later claim.
Examples include:
Three landmark decisions of the Supreme Court of Canada in 1978 capped the amount of general damages or pain and suffering compensation that plaintiffs can recover. These three decisions are:
Together, they capped general damages at $100,000. The cap is adjusted annually for inflation, and as of early 2026 it sits at approximately $470,000.
Here is a video interview with a leading Canadian personal injury law firm on compensatory damages:
Head over to the Special Reports page of Canadian Lawyer, one of our sister publications, which lists the best lawyers and firm across the country on different practice areas.
Ontario’s Insurance Act sets statutory deductibles and thresholds that apply to injuries from motor vehicle accidents. When a claim for pain and suffering falls below the annual threshold, the statutory deductible reduces the award.
Like the common law cap on general damages, the statutory deductible is also adjusted annually by the Financial Services Regulatory Authority (FSRA). For 2026, below are the deductibles for pain and suffering in Ontario:
In other words, if the non-pecuniary damages reach or exceed $159,708.71, the deductible does not apply, and the full amount is payable to the claimant. However, any award for pain and suffering below $159,708.71 is therefore reduced by the $47,913.01 deductible.
Recent and landmark Ontario cases on compensatory damages include the following:
In this case, a sports bar’s insurer has won a key coverage dispute at the Ontario Superior Court of Justice. The court found the insurer had no duty to defend a patron’s bodily injury claim, even though the policy covered compensatory damages for bodily injury.
Instead, broad assault and battery exclusions captured the over-service and forcible removal allegations, which wiped out the coverage. This decision highlights how broad exclusion wording can eliminate defence obligations in mixed negligence and assault claims.
The Ontario Court of Appeal upheld a $700,000 damages award in this landmark internet defamation case. The ruling sent a strong message about online smear campaigns. The court affirmed the trial court’s finding that a prolonged, anonymous email, and posting campaign was unrelenting, insidious, and reprehensible, and that its effects justified a large compensatory award.
The court also held that a plaintiff does not need to prove specific reputational loss to receive significant general damages for online attacks. It clarified that someone who helps plan or facilitate a smear campaign can be held liable for defamation.
This is one of the biggest medical negligence cases in Canada, with a compensatory damages award of $15 million. The plaintiff received this large award because her doctor was negligent in diagnosing a major stroke while she was in his care.
The court based the large award on the plaintiff’s suffering from a catastrophic and debilitating brain injury, as well as the doctor’s breach of the standard of care. The case remains instructive on how evidence, particularly expert witness testimony, can prove or disprove allegations of medical negligence.
Compensatory damages cannot erase an accident, but they can soften the financial blow on injured persons. Lawyers and claimants need to understand how courts weigh in on evidence under Canadian personal injury law. Done properly, compensatory damages help cover treatment, keep bills paid, and restore some stability at home.
Check out our Events page for the upcoming lawyer conferences across Canada, where personal injury law, including compensatory damages, is part of the discussion.
